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Market Commentary 18/08/16

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EUR/USD – New High After Stop Run

EUR/USD has made new highs today after running into the sell stops that had accumulated below yesterday’s low.

The stops were hit when the FOMC news was released at 7.00 yesterday evening. Upon the news coming out the market fell into the sell stops before rising up and hitting the buy stops which had been placed just above yesterday’s high. After that the price spent the next few hours continuing it’s move higher until Tuesday’s high was broken and buy stops that found up here were executed. Since then the price hasn’t really moved anywhere and has stayed in a small consolidation for most of the day.

It’s my belief the sell stops were used by the banks to get more buy trades placed into the market, if this is the case the de demand zone created by the FOMC coming out is the current point of interest because if the market comes back down to here the banks might use the sell orders created by the move to get more of their buy trades placed. We know they like to get their trades placed at prices close to where their other trades have been placed and this demand zone is the most recent location where they could have possibly got buy positions put into the market which is why if the market falls the drop is likely to terminate somewhere near the area.

USD/JPY – Failure To Break Through Lows

At the time of my last post USD/JPY had just entered the small demand zone created by a move up from the lows, the zone ended up being broken by another move lower but it was not enough to break through the current low in the market.

The move lower originated from the FOMC being released, you can see how the price started to turn once it had come to being within close proximity to the current low in the market. I think this low has been created by the bank traders taking profits off their sell trades and the move up we have seen today is simply them taking more profits off their trades at the same point where they took profits before. We are seeing a small fall start to take place and we need to be monitor if the market is able to break the current low or if we see another failure occur, for the minute I think it’s best if we wait for more price action to form before making any decisions to go long or short.

AUD/USD – Supply Zone Broken By FOMC

The supply zone which I marked in my last post ended up being broken by the move higher caused by the FOMC news being released.

The move came to an end close to where we have seen two previous drops take place, this leads me to believe the market may be in the process of reversing as each one of the downswings ( marked with arrows ) could be caused by the bank traders getting sell trades placed because they have been unable to get all of their trades placed at the price they want due to there being a lack of buy orders in the market. In the past couple of hours we have seen the market rise so now the area created by today’s drop needs to be watched in case the banks decide to get more sell trades placed into the market.

Finding Supply & Demand Zones That Work!

How Old Supply And Demand Zones Do Not Cause The Market To Reverse And The Reason Why ﻿Traders ﻿Mistakenly ﻿Believe They Do

Why The Time It Takes For The Market To Return To A Supply Or Demand Zone Will Determine Weather The Zone Has A High Chance Of Causing A Reversal To Take Place

The Differences Between Zones Created By Bank Traders Taking Profits And Zones Created by The Bank Traders Placing Trades